Global Advertising: Where's the growth?

ZenithOptimedia Group's Anne Austin takes a look at the trends that are driving advertising spend in the world's fastest-growing markets. The top-20 fastest-growing ad markets are on track to increase by 16.2 per cent on average during 2004 - an enormous percentage, when you consider the estimated global rise of 4.8 per cent. In fact, these markets will account for 9 per cent of total global ad expenditure this year. Top of the heap is expected to be Romania, which we believe will put on a massive 43.2 per cent, thanks largely to its 2004 general elections and associated economic factors, although Euro 2004 and the Olympics will help here too as elsewhere.

The spread of countries is interesting: there is an equal number of Asian and Eastern European markets represented in our top 20 (seven each), with Latin America bringing up the rear (four), one Eurozone country (Greece), and South Africa making up the numbers, squeezing in at number 18.

Key to many of these figures is a fast-growing economy. Worldwide, advertising accounts for an average 1.02 per cent of GDP. In many of the top 20, the proportion is much smaller, suggesting considerable room for growth. China is a case in point. There, ad expenditure accounted for only 0.54 per cent of GDP in 2003, surely offering the promise of much more in the foreseeable future.

And what of the relative importance of different media? Internet advertising is still very much a minority pursuit: it accounts for only 3.3 per cent of total global adspend and is growing less quickly in the fastest-growing markets than the world average. In 2004, the total growth in online spend in these markets is not expected to top 7.3 per cent, compared with 9.3 per cent across the world.

Radio is growing more than three times as fast in the top markets as the global average (10.9 per cent to 3.3 per cent) and newspaper and magazine spend are set to rise 13.7 per cent and 14.5 per cent respectively.

Worldwide, TV is still king: it accounts for a little more than 38 per cent of total spend, but in the markets on the list the figure is 50.2 per cent; TV spend is expected to increase by 14.5 per cent year on year in these countries against 6.1 per cent globally. TV tends to be popular with advertisers where it is hard to reach mass audiences in other ways.

So, for example, although levels of TV penetration and reach are often similar in Asia and Europe, TV spend accounts for around 45 per cent of the total in Asia, as opposed to only 33 per cent in Europe, where newspapers and magazines are much more popular. But more than anywhere else, TV rules in Latin America, where football is a religion, as are the telenovelas.

Here, TV spend makes up 56.3 per cent of the total, stretching to 64.9 per cent and 65 per cent in Venezuela and Panama respectively.

Outdoor advertising is set to grow 4.5 per cent worldwide in 2004, but at more than twice that rate (10.6 per cent) in the top 20. Two of the world's top-three outdoor markets in terms of national share of spend appear in the list: Russia (18.9 per cent) and Greece (14.2 per cent).

Outdoor also does well in several of the developing Asian markets such as Vietnam. In fact, the Asia-Pacific region was traditionally a stronghold of outdoor advertising; in 1991, 13.7 per cent of all spend in the area was outdoor.

But in many markets, low TV penetration combined with high illiteracy favoured the "pictures on walls" approach. These factors are not so much in evidence today and the result is that outdoor's share in Asia has been slipping since the early 90s; it now accounts for only 8.3 per cent.

Growing even faster than TV in our top markets is cinema, which is set to rise 15.4 per cent in 2004, against 6 per cent worldwide. Of all media, this one is the least market specific. Most of the films that put Malaysian, Argentine or indeed Hungarian bums on seats are the big Hollywood titles.

An exception is Thailand, which has its own film industry; cinema spend there is expected to reach US$29 million in 2004 (45 per cent year on year).

Of course, there are quirks. Brits are often surprised to discover, for example, that cinema advertising has never really taken off in the US, where it accounts for only 0.2 per cent of total adspend. So, if you're planning a trip Stateside and decide to take in a movie, don't make the mistake my ex did, when he went to see The Usual Suspects during a trip to LA. Expecting 20 minutes of ads, he turned up 15 minutes late for the feature, missed the crucial early scenes and spent the next two hours in an increasingly befuddled state wondering why everyone kept banging on about this Keyser Soze fellow.


Country Year-on-year Total spend Total spend

% change in (est) 2004 (est) 2003

current prices USdollars m USdollars m

04 v 03

1 Romania 43.2 192 153

2 Indonesia 29.8 2,364 1,821

3 Turkey 26.6 901 821

4 Venezuela 23.9 1,078 1,175

5 Lithuania 20.5 89 74

6 Russia 20.3 3,300 2,744

7 Panama 19.3 182 153

8 Hungary 17.0 1,741 1,488

9 Thailand 15.6 2,068 1,789

10 Philippines 15.0 638 554

11 China 14.0 8,538 7,489

12 Vietnam 13.1 208 184

13 Greece 12.5 2,324 2,065

14 Poland 11.2 3,027 2,721

15 Pakistan 11.0 156 140

16= Argentina 10.0 516 506

16= Chile 10.0 607 551

18 South Africa 8.7 1,324 1,218

19 Estonia 8.5 60 55

20 Malaysia 8.3 1,032 953

Country TV spend Newspaper Magazine GDP (est)

(est) 2004 spend (est) spend (est) 2004

USdollars m 2004 2004 USdollars bn

USdollars m USdollars m

1 Romania 130 - - 50

2 Indonesia 1,504 613 139 220

3 Turkey 458 312 16 199

4 Venezuela 700 224 24 78

5 Lithuania 39 25 10 16

6 Russia 1,640 - - 378

7 Panama 119 55 - 12

8 Hungary 1,167 201 196 76

9 Thailand 1,120 508 123 144

10 Philippines 412 - - 88

11 China 3,852 3,142 243 1,478

12 Vietnam 118 - - 44

13 Greece 765 353 761 152

14 Poland 1,848 348 438 210

15 Pakistan 78 48 13 75

16= Argentina 216 205 26 112

16= Chile 273 203 24 76

18 South Africa 571 361 156 121

19 Estonia 16 27 7 7

20 Malaysia 259 659 45 103

Notes: All figures given are in current prices Source: ZenithOptimedia.

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